2023 (6) TMI 843 - AT - Central Excise

Time Limitation - Suppression of facts or not - Method of Valuation - price variation clause - clearance of excisable goods to depot - to be valued as per Section 4(1)(b) of the Central Excise Act, 1944 read with Rule 7 of the Valuation Rules 2000 or not - HELD THAT - The Appellant has not suppressed any information from the department. They have filed ER-1 returns regularly intimating the duty paid by them for clearances made to their depot(s). They have also paid differential duty of Rs 2,28,137/- under price variation clause for the clearances made to the Delhi and Mumbai Depot(s). These details furnished by them in the ER-1 returns indicate that there is no suppression of fact involved in this case. The Appellant cited the receipt of a letter dated 17.09.2007 from the Range Superintendent on alleged short payment of duty due to under valuation wherein the he had asked them to pay an amount of Rs.3,59,269/- as duty on account of short payment of duty. This indicates that the Range Officer has verified the Returns submitted by them and demanded differential duty vide letter dated 17.09.2017. Therefore, demands raised by invoking extended period is not sustainable. The Appellant have paid differential duty for the normal period from December 2006 to November 2007. Since the Appellant have already paid the differential duty for the normal period from December 2006 to November 2007, no other demand in the impugned order survives - Appeal allowed.

Summary

Issues involved:
The case involves the assessment of duty paid by the manufacturer for goods cleared from the factory to their depots, the contention of the appellant regarding the method of valuation prescribed for clearance of excisable goods, and the challenge against demands raised by invoking the extended period under proviso to Section 11A(1) of the Central Excise Act, 1944.

Assessment of Duty Paid for Goods Cleared to Depots:
The Appellants, manufacturers of excisable goods, were involved in selling goods directly to customers or clearing them to their depots at Delhi and Mumbai. A Show Cause Notice was issued to them demanding differential duty for not following the prescribed method of valuation for clearance of excisable goods to depots. The Appellants admitted to not following the method of valuation as per the Central Excise Act and Valuation Rules. The demand was confirmed by the adjudicating authority along with interest and penalty, which was upheld by the Commissioner (Appeals). The Appellants contended that the majority of goods were cleared at the same price on which duty was paid, with only a small percentage sold at a higher price from the depots. They argued that the demands raised by invoking the extended period were not sustainable as they had regularly filed returns and paid the duty for clearances made to the depots.

Challenge Against Demands Raised by Invoking Extended Period:
The Appellants contested the demands primarily on the ground of limitation, stating that they had duly informed the Department about the practice followed in their monthly returns and that no objections were raised by the department or the audit party. They emphasized that they had paid the required duty under the price variation clause for clearances made to the depots. The Tribunal found merit in the Appellants' contention, noting that there was no suppression of information as evidenced by the regular filing of ER-1 returns. Additionally, the Appellants received a letter from the Range Superintendent regarding alleged short payment of duty due to undervaluation, indicating that the Range Officer had verified their returns and demanded differential duty. Consequently, the demands raised by invoking the extended period were deemed unsustainable.

Decision:
Considering the arguments presented and the evidence provided, the Tribunal set aside the impugned order and allowed the appeal filed by the Appellants. It was concluded that since the Appellants had already paid the required duty for the normal period, no further demands from the impugned order remained valid.